Restaurant chain Leon, which was sold by the billionaire Issa brothers to Asda, reported a loss of nearly £20m in the year of the sale.
The business had been acquired by the Issa brothers’ EG Group in 2021 before a majority of the group’s UK operations were offloaded to the supermarket giant for £2bn in October 2023, as reported by City AM.
At that time, Asda, headquartered in Leeds, was under the joint ownership of the Issa brothers and TDR Capital, with Walmart retaining a minority ten per cent stake.
A deal announced in June this year is nearing completion, which will result in Zuber Issa’s shares in Asda being taken over by TDR Capital.
Newly filed accounts at Companies House have now disclosed Leon’s financial performance in 2023.
According to the records, while the chain’s turnover rose from £52.1m to £64.9m, its pre-tax losses expanded from £13.2m to £19.5m during the same timeframe.
Leon has not recorded a pre-tax profit since achieving £358,793 in 2015.
Factors such as rail strikes and the increase in working from home arrangements have impacted Leon’s business.
The board released a statement saying: “Throughout 2023, the business saw continued recovery from Covid-19.”
“Weekly sales and footfall to our restaurants improved week by week, although the year remained challenging.”
“The UK economy was still on the road to recovery going into 2023 which was exacerbated by the war in Ukraine.”
“This again led to inflationary pressures, particularly seen with electricity costs and cost of sales.”
“Industrial action, particularly rail and tube strikes, further affected the business, given the location of many Leon restaurants to transport hubs, resulted in lower footfall and sales on strike days.”
“Furthermore, the working from home trend has impacted many Leon restaurants, particularly ones based in office centric locations and these have seen a slower recovery.”
“Management remain confident that sales will continue to recover and this is supported by continual improvement seen in 2024.”
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